DBSA concludes $81.30m loan facility with Mozambique’s EDM
The Development Bank of Southern Africa (DBSA) has provided finance to the Government of Mozambique's national energy utility, Electricidade De Mocambique, EDM.
The national utility has received a senior debt loan facility of US $ 81.30m from the DBSA for the rehabilitation and upgrading to Mozambique's energy supply network. This financing support is in line with Mozambique's plans to upgrade the country's power network in order to provide universal electricity access by 2030.
EDM has launched several projects aimed at strengthening the transmission grid and improving distribution capacity in Mozambique. Phase one which includes two or twelve projects, is ready for implementation at an estimated cost of US $ 81.30m (all inclusive). The projects are located in Pemba City and Maputo City.
The DBSA loan facility of US $ 81.30m will be advanced directly to EDM as a fifteen-year senior debt facility. Banco Nacional de Investimento, "BNI", Mozambique's development bank served as a due diligence and project evaluation partner in addition to providing capital raising and advisory services. GNI and DBSA are strategic partners as part of a longstanding MOU where the objectives are toge localized support and to enhance regional DFI partnerships and cooperation.
"We have been working with EDM and BNI for the past four years with a funding solution to rehabilitate its electricity network in the cities of Maputo and Pemba," said Zodwa Mbele, Group Executive, DBSA. DBSA is the only lender in the transaction. “What is noteworthy is the fact that DBSA made a strategic decision to assist Mozambique and its utility when no other lender was prepared to assist the country during a time of need while also heading a call from the Mozambican government to get involved in infrastructure projects” , she added. EDM's Chief Operating Officer commented that BNI was instrumental in negotiating guarantees on behalf of the Government of Mozambique.
"We believe the energy sector offers significant opportunities to provide both social and economic development in Mozambique with an anticipated 284,000 households receiving connectivity and stable power connection," said Davies Pwele, Head of SADC Coverage division at the DBSA. "The DBSA role as a key development partner in Mozambique goes back a long time with support and investment unceasing in supporting the country" critical energy infrastructure projects, "he concluded.
